Market Overview

The Sensex experienced a significant decline, shedding nearly 1,200 points on Friday, marking its fifth consecutive session of losses. Over the week, the index lost approximately 4,100 points or 5%, erasing gains accumulated over the past four weeks. From its September 26 peak of 85,978 points, the Sensex is now down 7,936 points or 9.2%.

A combination of global and domestic factors, including a hawkish statement from the US central bank chief, continuous foreign fund selling, a plunging rupee, and weak trade data, has negatively impacted investor sentiment.

Investor Impact

Foreign portfolio investors (FPIs) were net sellers for the day, offloading approximately Rs 3,600 crore, according to BSE data. In contrast, domestic funds recorded a net inflow of Rs 1,374 crore. The Nifty lost 364 points or 1.5% to close at 23,588 points.

The selloff has been widespread, affecting mid- and small-cap stocks significantly. The IT sector, which had been performing well in anticipation of rapid rate cuts, is notably underperforming.

Analyst Insights

Vinod Nair of Geojit Financial Services noted that the slower-than-expected rate cuts by the US Fed have adversely affected global market sentiment, particularly impacting the domestic market which is contending with high valuations and low earnings growth.

Osho Krishnan of Angel One advised extreme caution, stating that weak global cues initiated the downward move in the Indian market, and the subsequent selloff indicates a bearish outlook ahead of Christmas.

The day's session left investors poorer by Rs 9 lakh crore, with BSE's market capitalization now at Rs 449 lakh crore. From its all-time high peak at Rs 492 lakh crore, investors have lost about Rs 43 lakh crore worth of wealth.

Among the 30 Sensex stocks, 28 closed in the red, with Reliance Industries, HDFC Bank, and Mahindra contributing the most to the day's loss. Nestle and Titan closed only marginally higher.